In the case of The Estate of Maureen W. Vigne (dec’d) v. HMRC (TC06068), HMRC sought to disallow inheritance tax business property relief (BPR) on a livery business that needed land (some 30 acres) to make that business viable. In HMRC’s view, the facts of the case suggested that the land owner was letting the land for the use of others, that there was insufficient activity and expenditure of a business nature, and insufficient profitability to indicate anything other than an investment in land.
However, as the tribunal judge pointed out, the statute simply requires that a business exists and that the business is not a company consisting wholly or mainly of making or holding investments. It was clear to the judge that a business was being carried on and that valuable services were being provided to users of the livery which prevented that business from being one of holding investments.
The activities being carried out on the land did, to anyone not aware of the distinction between property and other businesses for IHT purposes, look and feel like a business. So, the taxpayer ultimately won on the grounds of common sense.
The decision recognises that BPR may now be available on activities where previously it would have been challenged, such as the grouse-shooting business operated by many landed estates. Provided it can be demonstrated that valuable services are also provided, those businesses may now benefit from the relief. Some landowners may be celebrating, quietly – it is after all open season for grouse.